President Donald Trump is ordering changes to the Public Service Loan Forgiveness program that would disqualify workers of nonprofit groups deemed to have engaged in “improper” activities.
An executive order being signed Friday directs the Education Department to modify the program to deny loan relief to some borrowers. It would exclude loan forgiveness for people whose work is tied to illegal immigration, foreign terrorist groups or other illegal activity, White House officials said.
Congress created the program in 2007 to encourage careers in the government or nonprofit groups. It offers to cancel any remaining student debt after borrowers make 10 years of payments while working in public service. It’s open to government workers, teachers, police, religious pastors and certain nonprofit employees, among others.
More than 2 million Americans have eligible employment and open student loans, according to December data from the Education Department.
At her Senate confirmation hearing, Education Secretary Linda McMahon pledged to continue Public Service Loan Forgiveness as ordered by Congress. “That’s the law,” she said in response to questions from Sen. Tim Kaine, D-Va.
Under current rules, nonprofits are eligible if they focus on certain areas including public interest law, public health or education. Trump’s order appears to target those who work in certain fields at odds with his political agenda, including immigration.
Advocates have gone to court to defend the program in the past, and Trump’s action is almost certain to face legal challenges. It drew quick backlash from advocates.
“Threatening to punish hardworking Americans for their employers' perceived political views is about as flagrant a violation of the First Amendment as you can imagine,” said Aaron Ament, president of the National Student Legal Defense Network.
Updating eligibility rules typically requires the Education Department to go through a lengthy federal rulemaking process. Any new regulation that started this year would usually not take effect until 2027.
The forgiveness program has been the subject of a political tug of war since Trump’s first term, when borrowers first started hitting the 10-year finish line.
The vast majority who applied for relief in 2017 were rejected because they were found to have enrolled in ineligible payment plans or failed to meet other criteria. An investigation by a federal watchdog group concluded the Education Department had failed to make the program's eligibility rules clear.
RELATED STORY | Dismantling the Department of Education: What does this mean for students and schools?
Under President Joe Biden, the Education Department loosened the program’s rules through a federal rulemaking process, expanding eligibility to people who would have been denied previously.
In its final weeks, the Biden administration announced it had granted relief to more than 1 million people through the program, up from 7,000 who were granted cancellation during Trump’s first term.
The Biden administration changes were assailed by Republican lawmakers who said only Congress had the authority to change the program’s rules.
Biden also pushed for broader student loan cancellation but was blocked by the Supreme Court and by repeated legal challenges from Republican-led states.
Republicans have been sharply opposed to student loan cancellation, saying it unfairly passes the cost to taxpayers who already repaid their loans or didn't go to college.
